Russia Tightens Crypto Mining Rules to Ease Energy Strain

The Russian government is preparing to implement stricter regulations for cryptocurrency miners, aiming to address the rapid growth of the mining industry and its impact on the country's energy supply. The Ministry of Energy has been tasked with finalizing these regulations, which include increased penalties for illegal mining activities and unauthorized connections to the power grid.

One of the key measures proposed is the ability for authorities to remotely disconnect crypto mining facilities from the power grid during peak demand periods. This move is intended to ensure that socially significant consumers, such as hospitals and schools, have reliable access to electricity. The energy ministry is also developing a mechanism to redistribute the released capacity to these critical consumers.

The new regulations categorize crypto miners as consumers of lesser importance, meaning their power supply reliability is not guaranteed. This categorization allows for remote restrictions on consumption during peak loads and under threat of energy and capacity shortages. The Russian government has been grappling with the unexpected surge in mining activities, which has turned energy surpluses into shortages in some regions.

In response to the rapid growth of the mining industry, Russia has already implemented partial or full bans on mining in a dozen energy-deficient regions, including Siberia, the North Caucasus, and occupied Ukraine. These restrictions, initially temporary, have been extended to six-year prohibitions in some cases. The government's actions are aimed at mitigating the strain on the power grid and ensuring a stable energy supply for essential services.

Additionally, the government is considering mandatory labeling and certification for foreign mining equipment imported into the Russian Federation. This move is part of a broader effort to establish a special register for devices used in digital currency mining, allowing authorities to accurately identify consumers using electricity for mining purposes. The revised regulations are expected to be submitted for government approval by the end of the current quarter, with gradual implementation in regions with active mining restrictions.

Despite the new regulations, companies and individual entrepreneurs are still allowed to mine cryptocurrencies as long as they register with the tax authority. However, less than a third of mining enterprises have complied with this requirement. Amateur miners using less than 6,000 kWh of electricity per month are exempt from mandatory registration. Law enforcement agencies have been actively shutting down illegal crypto farms to limit financial losses for the state and utilities, with the Rosseti grid operator collaborating with telecom companies to track down illegal miners by monitoring their internet traffic.